Union rejects 5.5% pay rise as Royal Mail plans modernisation to halt £1m per day losses
Posties have called four days of strike action in late August and early September as the Communication Workers’ Union rejected a proposed 5.5% pay rise from Royal Mail.
Around 115,000 workers are expected to walk out for 24 hours each time, on 26 and 31 August and 8 and 9 September, following a recent ballot in which 97.6% of CWU members voted to take industrial action.
With inflation currently at 9.4%, a 40-year high that’s expected to rise further this year, CWU general secretary Dave Ward said: “Nobody takes the decision to strike lightly, but postal workers are being pushed to the brink. There can be no doubt that postal workers are completely united in their determination to secure the dignified, proper pay rise they deserve.”
“The CWU’s message to Royal Mail’s leadership is simple – there will be serious disruption until you get real on pay.”
However, Royal Mail operations director Ricky McAulay commented: “After more than three months of talks, the CWU have failed to engage in any meaningful discussion on the changes we need to modernise, or to come up with alternative ideas.
“The CWU rejected our offer worth up to 5.5% for CWU grade colleagues, the biggest increase we have offered for many years. In a business that is currently losing £1million a day, we can only fund this offer by agreeing the changes that will pay for it.”
He added that the company has contingency plans to minimise disruption for consumers and businesses, but said: “Royal Mail can have a bright future, but we can’t achieve that by living in the past.”
Ensuring the greeting card industry’s concerns are heard, the GCA meets regularly with Royal Mail and is also in contact with Ofcom, which monitors the business closely as it’s the universal service provider so subject to more regulation than other postal operators – the next meeting is convened for 24 August.
Just last month Ofcom reiterated the requirement for Royal Mail to offer a six-day-a-week letter delivery service to every address in the UK, and announced it has “strengthened our monitoring requirements to gain a deeper understanding of the financial sustainability and efficiency of the universal service”.
GCA ceo Amanda Fergusson said this is something the association had requested from both Royal Mail and Ofcom, specifically the affordability of Saturday/Sunday Premium Services, and she added: “We also asked whether there was a clear case for Royal Mail to waive any proposed premium service charges over any Christmas period. We are delighted that Ofcom has confirmed they are continuing to look into this.”
Following the release of Royal Mail’s Trading Statement three weeks ago Walid Koudmani, chief market analyst at financial brokerage XTB, explained: “It showed some quite troubling results with revenue down 11.5% year-on-year in the first quarter as the group was greatly impacted by weakening retail trends.”
And with adjusted operating losses amounting to £92m, his analysis backed the company’s call to modernise to cut costs, as Walid said this is “reflecting inflexibility in the cost base to adjust to lower volumes while Q1 performance emphasised the need to act to make the most of new infrastructure”.
He added that investors had reacted negatively with share price dropping at the start of the sessions on the day the statement was released but cautiously concluded: “While there isn’t much reassurance in the report, there is still potential for the company to recover if it is able to implement the required measures.”